At the latest GlobalDairyTrade auction the key whole milk powder price went up nearly 20 per cent.

Dairy product prices climbed at the Global Dairy Trade auction, advancing for the sixth time in seven auctions, bolstered by a jump in whole milk powder amid lower supply.

The GDT price index jumped 11.4 per cent to US$3,327, up from US$2,965 at the previous auction two weeks ago. Some 27,735 tonnes of product was sold, down from 31,525 tonnes at the previous auction.

Whole milk powder soared 19.8 per cent to US$3,317 a tonne.

Last week Fonterra said it reduced its forecast milk volume for the 2016-17 season in New Zealand to 1,460 million kilogram of milk solids, 6.8 per cent below the volume collected last season, AgriHQ dairy analyst Susan Kilsby said in a note.